Initiated by the Financial Institution

Question 1

Investigations may be initiated?

Answer 1

from proactive monitoring for potentially suspicious activity & reactive measures taken to address regulatory findings, referrals or other recommendations

Question 2

What are the Common initiators to investigation

Answer 2

1) Regulatory recommendations
2) Official Findings
3) Referrals from customer-facing employees
4) Negative media information
5) Search warrant
6) Govt Subpoena
potentially suspicious activity detected from Transaction monitoring

Question 3

Why should FI initiate (do) TRANSACTION MONITORING

Answer 3

to regularly monitor transactions

to proactively identify potentially suspicious activity

Question 4

What are the common approaches for TM?

Answer 4

1 creation of in-house Team
2 customizable transaction monitoring rules
3 Third Party Vendor can be engaged to assist with the development and implementation of automated rules
4 use a risk-based approach

Question 5

What is included in common Approaches for TM

Answer 5

1 creation of in-house Team
2 customisation transaction monitoring rules
3 Third Party Vendor can be engaged to assist with the development and implementation of automated rules
4 use a risk-based approach

Question 6

What is included in the Tuning Pratices for TM

Answer 6

1) evaluating the output of monitoring rules
2) to determine whether rule adjustments are necessary conduct above and below-the-line testing and examine specific thresholds

Question 7

Elaborate Wolfsberg Group 2009 Statement on Monitoring, Screening and Searching

Answer 7

An institution’s transaction monitoring framework should be aligned to the risk of its business model,
the products and services offered, and its customer base. The same should be embedded in an institution’s
AML program

Question 8

Elaborate Wolfsberg Group 2009 Statement on Monitoring, Screening and Searching

Answer 8

An institution’s transaction monitoring framework should be aligned to the risk of its business model,
the products and services offered, and its customer base. The same should be embedded in an institution’s
AML program

Question 9

What additional points are discussed in Wolfsberg Group 2009 Statement on Monitoring, Screening and Searching

Answer 9

The document additionally discusses types of monitoring, typology reviews, and
staff training.

Question 10

What should be considered during designing transaction monitoring rules

Answer 10

size of the institution,

products offered, and the features of those products

Question 11

Financial institutions should

use a _____________to transaction monitoring

Answer 11

Risk-based approach

Question 12

What is a Tuning Practice

Answer 12

evaluating the output
of monitoring rules, examining specific thresholds and conducting above and below-the-line testing
to determine whether rule adjustments are necessary.

Question 13

What does the TM Document additional discuss

Answer 13

staff Training Program , typology reviews and types of monitoring

Question 14

What may be included in employee training programs in relation to referrals

Answer 14

Types of activity that may warrant referrals.

Existence of these referral mechanisms

Question 15

Internal hotlines are also known?

Answer 15

Ethics, compliance, or whistleblower hotlines.

Question 16

Who does the Internal hotlines help the employees

Answer 16

It allows the employee to eport a wide range of activity including employee fraud, harassment and discrimina-
tion, violations of code of conduct, theft of company property, and inappropriate gifts.

Question 17

Can FI retaliate against the person making the report

Answer 17

Financial institution is prohibited from retaliating against the person making a report via
the hotline in most jurisdictions and the financial institution must maintain policies, procedures, and
processes to confidentially investigate the information provided through the hotline

Question 18

Do banking regulatory agencies requires subpoenas or search warrants to conduct investigation

Answer 18

No , they do not. Rather, their authority to conduct examinations includes
the ability to inspect all books and records of a regulated institution.

Question 19

What is the two independent obligations of FI on receipt of governmental subpoena or search
warrant

Answer 19

(1) Legally fulfill the requirements of the subpoena or warrant, and (2) Determine whether the activity
of its customer identified in the subpoena or warrant requires the filing of a STR.

Question 20

Who can issue a Subpoenas

Answer 20

Subpoenas are usually issued by grand juries

Question 21

Why are he documents and

testimony required by law enforcement agency

Answer 21

These Documents and
testimony are designed to allow the law enforcement agency to investigate suspicious transactions,
develop evidence and, ultimately, put together a case for prosecution.

Question 22

Why will grand juries issue a Subpoenas to FI

Answer 22

Subpoenas empower a

law enforcement agency to compel the production of documents and testimony.

Question 23

What may be included along with order to freeze and account or prevent funds from getting withdrawn

Answer 23

sworn affidavit

Question 24

In some jurisdictions, freezing orders can also be

executed by seizure warrant. Yes or No

Answer 24

Yes

Question 25

Does search warrant also does not compel testimony.

Answer 25

No

Question 26

How is search warrant authorized

Answer 26

based on information contained in an affidavit submitted by a law enforcement officer.

Question 27

Where should the Privileged records be stored

Answer 27

stored in an area (e.g., a cabinet) marked “Attorney-Client Privilege.”

Question 28

What is the alternative in case law enforcement agents want to seize these records

Answer 28

the records be given to the court for safekeeping

Question 29

what are the key steps to conduct an effective investigation

Answer 29

riewing internal transactions,
identifying and reviewing external information t
contacting business line employees
generating a written report documenting relevant
findings.

Question 30

Steps to betaken basis example on Pg 208

Answer 30

a documented review of the customers’ accounts
for one year, including all transactions, KYC information, and social media searches for any
relevant negative media. The report must analyze the information reviewed and determine
whether or not a STR should be filed and any additional remedial measures.